Douugh CEO Amdy Taylor
After withdrawing from the US market in the December half of the year, fintech Douugh turned its attention to the rollout of its product in Australia. It hasn’t fared any better in the local market.
Douugh is a provider of app-based personal financial management tools that are designed to “challenge existing monoline providers of financial services by offering a new generation of customers access to a single banking and investing app to help them manage to grow their money”.
Its US business showed some early promise, with close to 100,000 customers and more than US$30 million of cash deposits. But the company said high interest rates and currency volatility impacted its ability to access the required capital to build on that momentum.
Dough’s plans for the local market were thrown into disarray when Volt Bank, which was to provide the banking service for the app, shut down more than a year ago.
The company was able to manage the “soft launch” of Stockback Rewards PNPL – a cash advance offer of up to $500 with a rewards program attached. It hopes to launch other products later this year.
Douugh earned revenue of just A$146,226 in the year to June, compared with revenue of $588,364 in 2021/22.
Despite making big cuts to its wage bill, administrative expenses and other operating costs, the company reported a loss of $6 million, compared with a loss of $11.3 million the previous year.
Net cash used in operating activities was $5.4 million. At the end of June the company had cash and cash equivalents of $746,665 and net assets of $325,319.
The company said it has an equity facility agreement of up to $20 million “available on call subject to placement capacity rules”. Those rules are not spelled out.
It also said it is in a position to implement additional cost savings.
Perhaps the most telling disclosure in the financial report is that the company had to launch its new offerings in the local market with only minimal marketing spend. The marketing budget was cut from $4.4 million in 2021/22 to $271,000 in the year to June.
Douugh might have great products but it won’t be challenging existing monoline providers of financial services if no one has heard of them.